How to Use Technology to Optimize Business Processes?
I want to explain with some practical examples how you can use technology to optimize any company process, including those traditionally considered to be in direct need of human resources and to be done in a certain way.
I will present some use cases of our tools within our central process optimization platform called ebitools.
Ebitools were developed from practice, that is, from the solutions we use in our own companies. One of my advantages is that I know both sides of business processes. On the one hand, as a developer, I have researched the background since I was 12 years old, and I am aware of what computers can do. I also know how it is possible to start from processes and optimize them, but on the other hand, I have been working with my employees since I was 16 and founded my first company.
By managing a company and observing different processes, it is always necessary to ask yourself whether a task needs to be performed by an employee or whether it can be redesigned so that all the hard work is done by the computer and software solutions.
A company without a procurement department
I will present how we tackled our company’s challenges based on observation in all areas where technology can help by optimizing processes. For example, in most companies, it is common practice to have people who pick up orders eight hours a day. This represents a high cost on the one hand and requires a large amount of time on the other hand. But in reality, the software can perform the whole process much more efficiently, which significantly improves the quality of orders. There are many additional benefits for both the company and external stakeholders – for example, order monitoring, process tracking, etc. Our company, which had four people in charge of orders, undertook optimization to completely automate all processes and no longer needs any staff to accept orders. In this way, we were able to redeploy staff to perform other, more creatively oriented tasks.
Similarly, in traditional companies the purchasing department is usually very busy. But with our solutions, we have optimized the work to the point where we do not have a purchasing department at all, although we have an extremely active company with high purchasing needs. We have developed a complete system that procures whole truck shipments on its own. It has upgraded logic, for example, depending on whether there will be sunny or rainy tomorrow, depending on how much money is currently in the business account, the planned cash flow, how much of the existing goods are in the warehouse, etc.
How to reduce 200,000 euro of costs to less than 1,000 euro?
Another outstanding example is the inventory department. Wholesale companies often write off up to 2% of goods, which, for instance, with a turnover of 10 million per year, costs 200,000 euro, because a particular share of goods is spoiled, lost, broken, etc. But usually, companies do an inventory at the end of the year and then find out the actual situation. This is a very passive approach, time-consuming and challenging, as it is practically impossible to remember events backwards and identify the reasons for the situation.
Observing the inventory process, we found that work is usually done so that no one has complete control over the process. It is not monitored on an ongoing basis if something is lost, broken, and there is no continuing recording and monitoring system. As an analogy in developing a software solution, we took an example of a person who goes shopping to the store because it is possible to clearly show how even a demanding process, such as inventory, can be optimized.
Before we head to the store, we open the fridge and take a rough look at what’s missing. We’re not dealing with things that seem like we have enough, but with what’s missing. This way, we are very fast and effective.
We can also implement the same system in the inventory process. As a team, we came up with the idea of teaching the computer, for example, which three items to look at every day, thus ensuring that the inventory takes place at all times. An additional advantage was that we could optimize the software by proposing precisely the right items, i.e. the most critical ones, and even those where the warehouseman does not waste much time counting. Instead, the computer suggests the most optimal products. Within one month, an inventory of all products is made, and the process starts again. In the stock mismatch case, it is necessary to inspect only the 30-day cycle, not as in the classic system, when the inspection has to be made for the whole year.
Thus, we have reduced costs in the company with this process to such an extent that product write-offs with a turnover of 10 million have been lower than 1000 euro for all years since the introduction of optimization, which brings vast savings and significantly increases business efficiency.
We can optimize all other processes in companies in similar ways.
Are you interested in finding out more?
Book a short meeting with us, and let’s see together what we can help you with and enable your company to make a remarkable shift in business and achieve better business results.
